with international guidelines for national accounts, NHS foundation
trusts will provisionally be classified in the public sector as
central government bodies.
The decision, taken by the Public Sector Classification Committee
(PSCC) of the ONS, is based on the judgment that government has
control of the general corporate policy of NHS foundation trusts.
NHS foundation trusts are a new type of organisation, called a
'public benefit corporation'. They will have members instead of
shareholders. Some control of NHS foundation trusts will rest with
their directors and members, the majority of whom will be from the
Foundation trusts will have additional freedoms, compared with
existing NHS trusts, but their ability to determine their general
corporate policy will be restricted by government involvement through
restrictions in both the planned legislation and regulatory powers:
- The imposition of borrowing limits
- A legal duty to follow NHS values
- Regulatory approval needed to amend constitutions
The ONS has decided that this involvement is sufficient to determine
the trusts as government controlled. This decision is provisional as
legislation on foundation trusts is going through parliament.
The PSCC also reviewed the classification of existing NHS trusts and
has decided that these should also be classified as central
government. They were previously classified as public sector
The PSCC's terms of reference are to consider requests for
classification advice and to decide on the appropriate National
Accounts classification. Its members are drawn from ONS staff who use
their personal expertise and call on the views of others as necessary
in formulating their responses.
Decisions are consistent with the principles of the international
statistical manuals, European System of Accounts 1995 ( ESA95) and the
System of National Accounts 1993 (SNA93) and supporting manuals and
Eurostat, the statistical office of the European Union, has also
considered the classification of NHS trusts and NHS foundation trusts
and agrees with the ONS's conclusions.
1. Under the National Statistics Code of Practice all important
methodological decisions, and the reasons for them, are to be made
publicly available in advance of the statistics based on them.
Further information on this decision is available on the National
Statistics website at: www.statistics.gov.uk/nhsfoundationtrusts.
2. The UK government's fiscal policy framework uses key statistical
indicators for the public sector. These indicators are based on the
National Accounts produced by ONS and the public sector is defined in
terms of the institutions that belong to it. ONS follows
international standards in deciding the sector classifications of all
institutions. When government creates new institutions, ONS
determines their classification, paying particular attention to those
thatmight be in the public sector, due to the importance of the
fiscal policy framework. From time to time classifications are
reviewed. ONS uses the PSCC to formulate decisions and more
information on the Committee is at: www.statistics.gov.uk/psa